The French economy is slowing only slightly in April due to the tightening of COVID-19 restrictions, easing concerns that school closures would cause a deeper contraction.
The Bank of France said activity will decline to 7 percent below pre-crisis levels in April after President Emmanuel Macron imposed stricter travel restrictions and ordered schools and nurseries to close. The hit to activity in March was 4 percent, better than previously estimated thanks improvements in services, industry and construction, according to the institution’s monthly survey.
French Finance Minister Bruno Le Maire warned the latest set of measures would dampen the economic rebound this year. Yet the central bank data add to evidence that European economies are proving more resilient than they were a year ago in the face of second and third-round lockdowns to control infections.
“While this estimation is subject to various risks, it shows the economy’s heightened resilience to tougher health restrictions, the Bank of France said.
Greater use of remote working and better management of social distancing rules contributed to the less-severe dive, Chief Economist Olivier Garnier said. Fewer sectors have ceased operating versus a year ago, more stores remain open, and stronger global trade is supporting manufacturing, he also said.
The April survey of 8,500 businesses found that the sharpest declines in service sector activity are in sectors such as car repairs, equipment leasing, hotels and leisure.
The Bank of France still expects the economy avoided a contraction in the first quarter and that it will grow about 5.4 percent in 2021.